Illinois Vehicle Sales Tax & Fees

Illinois Car Sales Tax

It’s exciting to buy a new (or new for you) car, but it’s also far from cheap.

Things like sales tax and other fees are often forgotten about in the excitement of making a new car purchase. But in Illinois, you’ll need to be prepared to spend additional money on these extra costs.

Here’s what to expect when it comes to taxes and fees in the state of Illinois.

How Much Is the Car Sales Tax in Illinois?

How Much Is Illinois Sales Tax

The state sales tax on a car purchase in Illinois is 6.25%. Therefore, you will be required to pay an additional 6.25% on top of the purchase price of the vehicle.

However, this does not include any potential local or county taxes.

The average local tax rate in Illinois is 1.903%, which brings the total average rate to 8.153%.

How to Calculate Illinois Sales Tax on a Car

You can calculate the sales tax in Illinois by multiplying the final purchase price by .0625%.

For example, let’s say that you want to purchase a new car for $30,000, you would use the following formula to calculate the sales tax:

$30,000 x .0625= $1,875

This means that your sales tax is $1,875 on a $30,000 purchase price.

Calculate Car Sales Tax in Illinois Example:

  • Initial Car Price: $30,000
  • Sales Tax Rate: 6.25%
  • Trade-In Amount: $5,000
  • Manufacturer/Dealer Rebate: $2,000

Sales Tax = ($30,000 - $5,000) * .0625
Sales Tax = $1,562.50

Remember that the total amount you pay for a car (out the door price) not only includes sales tax, but also registration, and dealership fees.

Do I Have to Pay Sales Tax on a Used Car?

Yes, in Illinois you must pay the car sales tax on a used vehicle. The sales tax rules remain the same whether the car is new or used.

Still, purchasing a used car is a wise choice for many. The overall price will be lower, which means you will pay less in sales tax than with a new vehicle.

Illinois Highest and Lowest TaxWhich County Has the Highest Tax? Which Has the Lowest?

Cook County, which consists of cities like Chicago, Calumet City, and Harvey, has the highest tax rate of 11.5%.

Mclean and Ogle Counties have the lowest tax rate of 6.25%.

Car Sales Tax for Trade-Ins in Illinois

Trade in IllinoisYou don’t have to pay sales tax on trade-ins in Illinois. In other words, be sure to subtract the trade-in amount from the car price before calculating sales tax.

As an example, let’s say you are purchasing a new SUV for $35,000 and your trade-in is worth $10,000. You will subtract the trade-in value by the purchase price and get $25,000. Therefore, your car sales tax will be based on the $25,000 amount.

As of January 1st, 2022, Illinois removed the $10,000 cap on trade-ins for tax savings. Now car buyers can receive the full tax credit on trade-ins.

Car Sales Tax on Private Sales in Illinois

A sales tax is required on all private vehicle sales in Illinois.

However, if the vehicle is less than $15,000 the tax amount is based on the model year. Here is a breakdown:

  • 2021 or newer - $465
  • 2020 - $365
  • 2019 - $290
  • 2018 - $240
  • 2017 - $190
  • 2016 - $165
  • 2015 - $155
  • 2014 - $140
  • 2013 - $125
  • 2012 - $115
  • 2011 or older - $100

If the vehicle is over $15,000, then tax is determined by the purchase price. Here is a breakdown:

  • $15,000 to $19,999.99 - $850
  • $20,000 to $24,999.99 - $1,100
  • $25,000 to $29,999.99 - $1,350
  • $30,000 to $49,999.99 - $1,600
  • $50,000 to $99,999.99 - $2,600
  • $100,000 to $999,999.99 - $5,100
  • $1,000,000 or more - $10,100

Tax on Rebates & Dealer Incentives

Tax on Incentives Illinois

You have to pay tax on dealer and manufacturer rebates in Illinois. In other words, do not subtract the rebate/incentive amount from the car price before calculating sales tax.

As an example, if you are purchasing a new car for $30,000 with a $5,000 rebate, you will pay sales tax on the full $30,000 cost of the car.

Illinois DMV/State Fees

There are some other state and DMV fees associated with the purchase of a vehicle in Illinois.

A few of these fees include:

  • Registration Fee: $151
  • Title Fee: $155
  • Plate Transfer Fee: $26

Illinois Dealership Fees

Dealerships apply extra fees, sometimes referred to as “doc fees,” with the sale of the car.

Though these fees vary based on the dealership, the average fee in Illinois is $160, with a statewide limit of $324.24 on how much dealerships can charge.

When Sales Tax Is Exempt in Illinois

Illinois Tax Exemptions

Much like every state, Illinois has some sales tax exemptions for vehicle sales. Exemptions include:

  • Purchaser is a tax-exempt organization
  • Vehicles used in agriculture
  • Vehicle is an estate gift to a surviving spouse
  • Out-of-state purchaser and vehicle was used outside Illinois for at least three months.

Some exceptions (tax due is $15) include:

  • Vehicle is an estate gift to someone other than surviving spouse
  • Vehicle is transferred in a business organization
  • Vehicle is transferred from a spouse, parent, brother, sister, or child.

Illinois EV Rebates & Incentives

Illinois offers up to $4,000 in rebates on a new or used electric vehicle purchase. This is on top of the up to $7,500 rebate offered by the federal government.

 

Tax information and rates are subject to change, please be sure to verify with your local DMV. 

Frequently Asked Questions

What is the sales tax on a car purchased in Illinois?

The state sales tax on a car purchase in Illinois is 6.25%. The average local tax rate in Illinois is 1.903%, which brings the total average rate to 8.153%.

Do I have to pay sales tax on a used car in Illinois?

Yes, in Illinois you must pay the car sales tax on a used vehicle. The sales tax rules remain the same whether the car is new or used.

Which county in Illinois has the lowest tax? Which has the highest?

Cook County, which consists of cities like Chicago, Calumet City, and Harvey, has the highest tax rate of 11.5%. Mclean and Ogle Counties have the lowest tax rate of 6.25%.

Do I have to pay sales tax on a gifted car in Illinois?

You do not have to pay the full sales tax if the vehicle is gifted to you. However, there may be a $15 fee.

Does a trade-in reduce sales tax in Illinois?

Yes, you don’t have to pay sales tax on trade-ins in Illinois. In other words, be sure to subtract the trade-in amount from the car price before calculating sales tax.

How can I avoid paying sales tax in Illinois?

The following events are not taxable when it comes to vehicle transfers:

  • Purchaser is a tax-exempt organization
  • Vehicles used in agriculture
  • Vehicle is an estate gift to a surviving spouse
  • Out-of-state purchaser and vehicle was used outside Illinois for at least three months.